nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2008‒01‒19
nine papers chosen by
Erik Thomson
University of Chicago

  2. Keynes and the Post Keynesians on Sustainable Development By Eric BERR (GREThA)
  3. The Concept of Institution in Economics and Sociology, a Methodological Exposition By Piet Keizer
  4. An Economist’s Plaidoyer for a Secular Ethics. The Moral Foundation and Social Role of Critical Rationalism By GORINI STEFANO
  5. Utility-Based Utility By David Cass
  7. International Money and Finance By Paul Hallwood; Ronald MacDonald
  8. Emergent Cultural Phenomena and their Cognitive Foundations By C. Cordes
  9. Law, State Power, and Taxation in Islamic History By Metin Cosgel; Rasha Ahmed; Thomas Miceli

  1. By: Drakopoulos, Stavros A.
    Abstract: ABSTRACT Phillip Wicksteed’s ideas played an important role in the history of economic methodology. This is because of two reasons: The first was that his views represent the starting point of the deliberate attempt to expel normative issues from marginalist economic analysis. The second reason was that his ideas influenced his disciple L. Robbins, who was one of the first theorists to set the methodological basis for an allegedly value-free economic science. The paper examines Wicksteed’s conception of a positive economic science and the role of normative aspects. In the same context, his views on the nature and the role of economic man, and his analysis of selfish and altruistic behaviour are also discussed. Finally, the work combines the above with Wicksteed’s economic methodology in order to asses his overall role and influence on the development of the trend towards a value-free economic theory.
    Keywords: Marginalism; Wicksteed; Normative; History of Economic Thought
    JEL: B3 B4
    Date: 2007–09–01
  2. By: Eric BERR (GREThA)
    Abstract: Since the beginning of the 1970s, the questions related to ecology come in the forefront and progressively led to the adoption of the concept of sustainable development, which now appears to be a new world-wide objective. We argue that numerous writings of Keynes contain the premises of such a sustainable development. We present his views relatively to the three pillars of sustainability: ecological, social and financial. Indeed, Keynes’ positions on uncertainty, money, the place of economics, arts, financing, philosophy, etc. are consistent with a strong sustainability. Finally, we try to give some insights for an indispensable 21st century post Keynesian sustainable development program.
    Keywords: Keynes, sustainable development, Post Keynesian
    JEL: B31 E12
    Date: 2008
  3. By: Piet Keizer
    Abstract: In social science the concept of ‘institution’ plays a very important role. There are, however, significant differences in the way the concept is interpreted by the different schools of thought. Within economics is a divide between Original Institutional Economics and New Institutional Economics. Within sociology the Classical Sociology approaches the concept differently compared with the way Micro-Sociology is interpreting it. Serious methodological differences make a fruitful confrontation between the different approaches almost impossible. This paper shows that a methodological synthesis is possible. The method of isolated abstraction, as applied by orthodox economics has the potential to offer a synthesis by adding social and psychic logic to the analysis of economic logic. Moreover, the application of methodological institutionalism can overcome the divide between the typical micro and the typical macro methodology.
    Keywords: economic institutions, social institutions, logical approach, historical approach, methodological institutionalism, methodological synthesis
    JEL: B10 B20 B40 B50
    Date: 2007–11
    Abstract: This paper is an inquiry into the theoretical, ethical and social implications of the adoption of the rationalist attitude to the understanding of the world, aka critical rationalism. It is structured around four tightly connected claims. The first claim equates the distinction between morality and economics to the distinction between values and interests. The second claim relates the theoretical connotation of critical rationalism - a secular world-view - to its ethical connotation - the secular ethics of individual freedom, independence and responsibility commanded by the ‘belief’ in reason alone, showing them to be the two non-separable sides of a single way of conceiving human existence. The third claim highlights the crucial civic role of such secular ethics vis à vis the non-secular moral messages of religion and ideology, and the secular non-moral message of wellbeing, social success, and power. It holds a unique individual sentiment of social solidarity, as well as the requirement of a liberal social order without the slightest trace of fundamentalism. The fourth claim distinguishes moral from social justice. The former is only about values: the protection of the secular value of the individual sentiment of self-respect, or freedom-independence, and has nothing to do with the distribution of wellbeing among people. The latter is only about interests: the equality-inequality of such distribution, and has nothing to do with morality.
    Date: 2007–12
  5. By: David Cass (Department of Economics, University of Pennsylvania)
    Abstract: A major virtue of von Neumann-Morgenstern utilities, for example, in the theory of general financial equilibrium (GFE), is that they ensure intertemporal consistency: consumption-portfolio plans (for the future) are in fact executed (in the future) — assuming that there is perfect foresight about relevant endogenous variables. This note proposes an alternative to expected utility, one which also delivers consistency between plan and execution — and more. In particular, it turns out that one special case is in fact simply discounted (subjective) expected utility. Moreover, this alternative formulation affords an extremely natural setting for introducing extrinsic uncertainty. The key idea behind my approach is to divorce the concept of filtration (of the state space) from any considerations involving probability (on the state space), and then concentrate attention on nested utilities of consumption looking forward from any date-event: utility today depends only on consumption today and prospective utility of consumption tomorrow, utility tomorrow depends only on consumption tomorrow and prospective utility of consumption the day after tomorrow, and so on.
    Keywords: Utility theory, Expected utility, Intertemporal consistency, Extrinsic uncertainty, Cass-Shell Immunity Theorem
    JEL: D61 D81 D91
    Date: 2007–12–15
  6. By: Bernarda Zamora (Universidad de Alicante)
    Abstract: This paper formally describes the Human Capital Theory as a Research Programme that fits into the classical economic Research Programmes. The fundamental ¿hard core¿ assumption which converts the Human Capital Theory into a Research Programme itself in Lakatosian terms is based upon the embodiment of the human capital in the person investing in it. The paper shows how the auxiliary ¿protective belt¿ assumptions and the empirical content of the theory are linked to and derived from the ¿hard core¿ assumptions in such a way that the Human Capital Theory satisfies the conditions to be considered a Scientific Research Programme.
    Keywords: Lakatos, Research Programme, Human Capital.
    JEL: B41 J24
    Date: 2007–12
  7. By: Paul Hallwood (University of Connecticut); Ronald MacDonald (University of Glasgow)
    Abstract: We discuss the effectiveness of pegged exchange rate regimes from an historical perspective, drawing conclusions for their effectiveness today. Starting with the classical gold standard period, we point out that a succession of pegged regimes have ended in failure; except for the first, which was ended by the outbreak of World War I, all of the others we discuss have been ended by adverse economic developments for which the regimes themselves were partly responsible. Prior to World War II the main problem was a shortage of monetary gold that we argue is implicated as a cause of the Great Depression. After World War II, more particularly from the late-1960s, the main problem has been a surfeit of the main international reserve asset, the US dollar. This has led to generalized inflation in the 1970s and into the 1980s. Today, excessive dollar international base money creation is again a problem that could have serious consequences for world economic stability.
    Keywords: Bretton Woods, exchange rate expectations gold standard, new Bretton Woods, realignment expectations, pegged exchange rates, target zone, world economic instability
    JEL: F31 F33 N20
    Date: 2008–01
  8. By: C. Cordes
    Abstract: To explain emergent cultural phenomena, this paper argues, it is inevitable to understand the evolution of complex human cognitive adaptations and their links to the population-level dynamics of cultural variation. On the one hand, the process of cultural transmission is influenced and constrained by humans’ evolved psychology; people tend to acquire some cultural variants rather than others. On the other hand, the cultural environment provides cultural variants that are transmitted to or adopted by individuals via processes of social learning. To gain insights into this recursive relationship between individual cognitive dispositions at the micro level and cultural phenomena at the macro level, the theory of gene-culture coevolution is applied. Moreover, a model of cultural evolution demonstrates the dissemination of novelty within a population via biased social learning processes. As a result, some unique facets of human behavior and cumulative cultural evolution are identified.
    Keywords: Cultural Evolution, Social Learning, Diffusion Dynamics, Coevolution, Evolutionary Economics Length 22 pages
    Date: 2007–12
  9. By: Metin Cosgel (Economics Dept., The University of Connecticut.); Rasha Ahmed (Economics Dept., The University of Connecticut.); Thomas Miceli (Economics Dept., The University of Connecticut.)
    Abstract: This paper studies the unique nature, institutional roots, and economic consequences of the ruler’s political power in Islamic History. An influential interest group in Islamic societies has been the legal community, whose power could range from being able to regulate the rulers to being entirely under their control. The struggle was over the provision of legal goods and services, the legal community gradually gaining control of the law in history and the rulers seeking to appropriate political power by controlling the legal community. The economic consequence of power was the ability to dictate the choice of tax bases and rates.
    Keywords: state power, taxation, political economy, Islamic Law, legal community
    JEL: K3 H2
    Date: 2008–01–15

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